Dow fell 61, decliners over advancers 3-2 & NAZ lost 39. The MLP index dropped 3+ to the 251s, extending its longer terms sideways trend shown below, & the REIT index was off 2+ to the 375s on profit taking. Junk bond funds were weak & Treasuries rose in price. Oil slid lower in the 58s & gold gained 9 to 1321 on fears of a global slowdown.
AMJ (Alerian MLP Index tracking fund
US, global shares trade mixed following retreat on Wall Street
A much-weaker-than-expected Feb hiring total, a potentially one-month surprise within a still-strong job market, soured the latest broad-based measure of the US economy from the Chicago Federal Reserve. The Chicago Fed's index of national economic activity registered at a negative 0.29 in Feb down from an upwardly revised negative 0.25 in Jan. The Dec reading was just in positive territory, capping a string of consecutive positive readings from Jun thru the end of last year. The volatile nature of the monthly data puts added emphasis on following the index's less-volatile, 3-month moving average. It decreased to a negative 0.18 in Feb from a neutral reading in Jan. The bank also warned that the partial gov shutdown earlier this year has complicated its index creation on a temporary basis. The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth & a 3-month above 0.70 suggests an increasing likelihood of a period of sustained increasing inflation. 38 of the 85 individual indicators made positive contributions in Feb, while 47 made negative contributions. 37 indicators improved from Jan to Feb, while 48 indicators deteriorated. Employment-related indicators contributed a negative 0.10 to the Chicago index, down from positive 0.07 in Jan. The economy added just 20K new jobs last month, the smallest gain since Sep 2017, the gov said in its release. The number of new nonfarm jobs created last month was well below the 172K forecast, but the slowdown was probably exaggerated by heavy snow & other seasonal oddities that are unlikely to persist. The US has been adding more than 200K new jobs a month for the past year. Meanwhile, the contribution of the personal consumption & housing category to Chicago Fed's index ticked down to negative 0.06 in Feb from negative 0.03 a month earlier. Production-related indicators, primarily factories, contributed a negative 0.16 in Feb from an upwardly revised negative 0.29 in Jan.
Oil futures fell amid persistent worries about a recessionary environment taking hold of major global economies & the potential effect contractions could have on energy demand. West Texas Intermediate crude for May delivery fell 65¢ (1.1%) at $58.39 a barrel. On Fri, the front-month contract fell 1.6%, but ended 0.4% higher for the week. May Brent crude was 14¢ (0.2%) lower at $66.89 a barrel, after booking a weekly decline of 0.2%. It lost 1.2% in Fri's session. Fear of a global economic slowdown were heightened last week after manufacturing data showed further signs of weakness in the US & Europe, with the US flash manufacturing PMI at 52.5 in Mar versus 53 a month earlier. The purchasing-managers-index readings for the eurozone also came in much weaker than expected. A reading of at less than 50 indicates deteriorating conditions. The data as well as a slump in Treasury yields — & an inversion of the yield curve — underlined those economic worries. Still, efforts by OPEC to reduce output & US sanctions on Venezuela & Iran have provided some support for prices, which have climbed by more than 20% YTD. Members of the OPEC & other major oil producers, including Russia, have pledged to curb crude production by around 1.2M barrels per day from Oct levels for H1 to prop up markets.
The federal agency that insures mortgages for first-time home buyers is tightening its standards, concerned it is allowing too many risky loans to be extended. The Federal Housing Administration told lenders this month it would begin flagging more loans as high risk. Those mortgages, many of which are extended to borrowers with low credit scores & high loan payments relative to their incomes, will now go thru a more rigorous manual underwriting process, the FHA said. The FHA tries to boost homeownership by insuring loans to borrowers with less-than-stellar credit, lessening the risk for lenders. The agency is worried that lenders are making loans to borrowers who can't repay, leading to a spike in defaults that strains the agency's reserves. The FHA's decision to tighten underwriting standards could mean fewer first-time home buyers are able to get mortgages. Roughly 40-50K loans a year likely would be affected, about 4-5% of the FHA-insured mortgages originated annually in recent years, according to the FHA.
Stocks continue to stumble around. The Dow hasn't been able to find traction since mid Feb to extend its almost 3 month rally. Mar & Q1 will be coming out shortly & early indications are for unimpressive readings. The bulls have gone on vacation.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund
| CL=F | Crude Oil | 58.71 | -0.33 | -0.6% |
| GC=F | Gold | 1,319.40 | +7.10 | +0.5% |
US stocks & shares in Europe & Asia traded mixed after markets ended last week with a broad retreat. Today's weak performances came amid a lull in news on the tariff war
between the Beijing & DC. China-US trade talks are due to
resume Thurs in Beijing. In Europe, London's FTSE lost 0.4%, Germany's DAX dropped 0.2% & France's CAC declined 0.3%. The
declines started in Asia, where China's Shanghai Composite dropped 2%, The Hang Seng in Hong Kong also lost 2% & Japan's
Nikkei skidded 3%.
US, global shares trade mixed following retreat on Wall Street
A much-weaker-than-expected Feb hiring total, a potentially one-month surprise within a still-strong job market, soured the latest broad-based measure of the US economy from the Chicago Federal Reserve. The Chicago Fed's index of national economic activity registered at a negative 0.29 in Feb down from an upwardly revised negative 0.25 in Jan. The Dec reading was just in positive territory, capping a string of consecutive positive readings from Jun thru the end of last year. The volatile nature of the monthly data puts added emphasis on following the index's less-volatile, 3-month moving average. It decreased to a negative 0.18 in Feb from a neutral reading in Jan. The bank also warned that the partial gov shutdown earlier this year has complicated its index creation on a temporary basis. The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth & a 3-month above 0.70 suggests an increasing likelihood of a period of sustained increasing inflation. 38 of the 85 individual indicators made positive contributions in Feb, while 47 made negative contributions. 37 indicators improved from Jan to Feb, while 48 indicators deteriorated. Employment-related indicators contributed a negative 0.10 to the Chicago index, down from positive 0.07 in Jan. The economy added just 20K new jobs last month, the smallest gain since Sep 2017, the gov said in its release. The number of new nonfarm jobs created last month was well below the 172K forecast, but the slowdown was probably exaggerated by heavy snow & other seasonal oddities that are unlikely to persist. The US has been adding more than 200K new jobs a month for the past year. Meanwhile, the contribution of the personal consumption & housing category to Chicago Fed's index ticked down to negative 0.06 in Feb from negative 0.03 a month earlier. Production-related indicators, primarily factories, contributed a negative 0.16 in Feb from an upwardly revised negative 0.29 in Jan.
February hiring slump tugs down Chicago Fed’s national economic measure
Oil futures fell amid persistent worries about a recessionary environment taking hold of major global economies & the potential effect contractions could have on energy demand. West Texas Intermediate crude for May delivery fell 65¢ (1.1%) at $58.39 a barrel. On Fri, the front-month contract fell 1.6%, but ended 0.4% higher for the week. May Brent crude was 14¢ (0.2%) lower at $66.89 a barrel, after booking a weekly decline of 0.2%. It lost 1.2% in Fri's session. Fear of a global economic slowdown were heightened last week after manufacturing data showed further signs of weakness in the US & Europe, with the US flash manufacturing PMI at 52.5 in Mar versus 53 a month earlier. The purchasing-managers-index readings for the eurozone also came in much weaker than expected. A reading of at less than 50 indicates deteriorating conditions. The data as well as a slump in Treasury yields — & an inversion of the yield curve — underlined those economic worries. Still, efforts by OPEC to reduce output & US sanctions on Venezuela & Iran have provided some support for prices, which have climbed by more than 20% YTD. Members of the OPEC & other major oil producers, including Russia, have pledged to curb crude production by around 1.2M barrels per day from Oct levels for H1 to prop up markets.
Oil futures edge lower as investors fret over a world-wide economic slowdown
The federal agency that insures mortgages for first-time home buyers is tightening its standards, concerned it is allowing too many risky loans to be extended. The Federal Housing Administration told lenders this month it would begin flagging more loans as high risk. Those mortgages, many of which are extended to borrowers with low credit scores & high loan payments relative to their incomes, will now go thru a more rigorous manual underwriting process, the FHA said. The FHA tries to boost homeownership by insuring loans to borrowers with less-than-stellar credit, lessening the risk for lenders. The agency is worried that lenders are making loans to borrowers who can't repay, leading to a spike in defaults that strains the agency's reserves. The FHA's decision to tighten underwriting standards could mean fewer first-time home buyers are able to get mortgages. Roughly 40-50K loans a year likely would be affected, about 4-5% of the FHA-insured mortgages originated annually in recent years, according to the FHA.
FHA tightens underwriting standards on government-backed mortgages
Stocks continue to stumble around. The Dow hasn't been able to find traction since mid Feb to extend its almost 3 month rally. Mar & Q1 will be coming out shortly & early indications are for unimpressive readings. The bulls have gone on vacation.
Dow Jones Industrials
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